FY20 Factbook
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TUI Group Factbook December 2020 TUI GROUP - REASONS TO INVEST & BUSINESS OVERVIEW TUI GROUP | Factbook | December 2020 Reasons to invest Fulfilment distinguishes TUI from 1 Holidays remain a high priority 4 competition - ability to take risks and shape markets Leading, trusted brand with 2 Integrated business model with strong 5 customer base and distribution power differentiated products TUI is strategically well positioned to Accelerated digital transformation due 3 6 deliver sustainable growth to C-19 pandemic TUI is well positioned to benefit from market recovery post C-19 Fulfilment: Strategic control of the value chain – ability to take risks and shape market 3 TUI GROUP | Factbook | December 2020 World arrivals expected to show strong increase in 2021 & return to 2019 levels in 2022 ACTUAL DEVELOPMENT FORECAST2 COMMENTS World arrivals both leisure and business travel (bn)1 Return to . MINTEL Holiday Review Report FY19 levels (January 2021) findings: 1,5 1,4 1,5 1,3 1,3 o “Travel operators should prepare COVID-19 for a surge in bookings when the crisis UK government unveils its re- opening roadmap” 0,7 o 32% of UK adults plan to take a holiday this year but do not know when they will book yet 2017 2018 2019 2020e 2021e 2022e Leisure travel expected to recover sooner than business travel in a consolidated market Source: Euromonitor International, Travel 2021 edition I 1 Arrivals refer to non-resident overnight visitors to the country of reference, travelling for business and leisure purposes, excluding same day visitors. If a person visits the same country several times each year, each trip is recorded as a separate arrival. If a person visits several countries during a single trip, their arrival in each country is recorded separately. I 2 Euromonitor baseline forecast, 9 July 2020 4 TUI GROUP | Factbook | December 2020 Industry fundamentals from TUI’s perspective MARKETS & AIRLINES HOTELS • Leisure travel will return to previous levels with • Short-term overcapacities expected packages remaining important • Strong hotel brands will benefit • Later booking profile expected for duration of crisis • Best-in-class sales capabilities key for growth: Focus • Long-haul will recover quickly once vaccine available on brand, product and digital capability • Own airline is essential in an end-to-end model CRUISES TUI MUSEMENT • Market expected to recover strongly when vaccine • Market will return to growth with experiences available remaining important • Old tonnage will leave the market • Consolidation and digitalisation will accelerate • Supply shortage to persist • Platform strategy will drive growth 5 TUI GROUP | Factbook | December 2020 TUI strongly positioned to be a key beneficiary beyond the crisis INTEGRATED BUSINESS MODEL WITH MARKETS & HOLIDAY TOURISM SECTOR FUNDAMENTALS DIVERSIFIED CUSTOMER BASE & AIRLINES EXPERIENCES REMAIN ATTRACTIVE & UNCHANGED DISTRIBUTION POWER 21m customers 433 Hotels1 ~140 aircraft2 17 Cruise ships2 Own & 3rd party TRANSFORMATION TO LEANER & STRONG BRAND PROPOSITION distribution 1m “things to do” MORE AGILE STRUCTURE 3 % 30% of profit pool % 70% of profit pool3 STRENGTHENED POSITION FROM ACCELERATED DIGITALISATION / FURTHER CONSOLIDATION GLOBAL REALIGNMENT PROGRAMME Transformed TUI will benefit from key market position, driving return to profitable growth Note: All data as at Sep 2019 unless otherwise stated I 1 Includes Group hotels and 3rd party concept hotels as at Sept 2020 | 2 As at Sept 2020 | 3 Excluding cost impact of 737 MAX in Markets & Airlines segment 6 TUI GROUP | Factbook | December 2020 Summary: Drive transformation and return to profitable growth FY20: STRONG START & C-19 FY21: TRANSITION FY22+: PROFITABLE GROWTH • Exceptional start to S20 trading • Bookings uplift and revenue recovery to • Trusted, leading brand with differentiated • Swift and disciplined liquidity correlate with easing of travel restrictions products strongly positioned to benefit management • Resume growth trajectory from FY19 from expected market consolidation • 2.3m1 customers departed on reopening • Deliver on Global Realignment Programme • Cost base savings from Global Realignment • Pent up demand evident transforming cost structure Programme visible • FY20 loss solely driven by C-19 travel ban • Digital acceleration prioritised • Structurally leaner and more agile • Rebuild a robust financial profile • Digital initiatives drive further profitability Customers want to resume Enhance Profitable growth - stronger, leisure travel lean and agile structure less capital intensive & more digital 1 Departed PAX between mid June & end of October 7 TUI GROUP | Factbook | December 2020 GLOBAL REALIGNMENT PROGRAMME TUI GROUP | Factbook | December 2020 Global realignment programme drives TUI’s strategic initiatives… REDUCE COSTS REDUCE CAPITAL INTENSITY DRIVE DIGITALISATION • Accelerate Transformation project • Asset-right strategy in Hotels & Cruises • Increase accommodation only, seat • Merge tasks and organizations across the • Reduction of investment levels only and dynamic packaging Group • Rightsizing of airlines & order book; • Drive online strategy • Global consolidation of IT structures restructuring • Enhance transformation of DX to a • Targeting to permanently reduce our • Divest/address non-profitable activities digital business overhead cost base by 30% across the • Grow TUI ecosystem Group • Impact on potentially 8,000 roles globally • Save costs while enhancing quality Overall cost reduction target increased from ~€300m to ~€400m p.a. with first benefits expected in FY21 9 TUI GROUP | Factbook | December 2020 …and is on track to meet ~€400m p.a. cost reduction target PILLARS RECENT PROGRESS PHASING • FY20 H1: Announced programme REDUCE COSTS with potential impact on 8k roles P&L view ~€400m p.a • ~5k reduction in FTEs to date • TUI Musement: ~2k FTE reduction €303m to date (~25% reduction) as part REDUCE of transformation to ”digital first“ model CAPITAL INTENSITY ~€120m • TUI fly Germany: Restructuring plan ongoing to reduce number of ~€40m aircraft & bases DRIVE • Retail & core functions: Over half FY20A FY21e FY22e FY23e DIGITALISATION of planned savings already achieved Per annum benefits SDI Cost improvements delivering significant savings across the Group 10 TUI GROUP | Factbook | December 2020 GROUP FINANCIALS TUI GROUP | Factbook | December 2020 Income Statement – Key Figures FY20 FY20 FY19 In €m IFRS 16 IAS 171 adjusted2 • FY20 results significantly affected by the COVID-19 Revenue 7,943.7 7,952.9 18,928.1 related travel suspension in Q3 and limited restart Underlying EBITDA -1,615.0 -2,242.6 1,359.5 potential in Q4 Depreciation -1,382.0 -790.2 -466.0 Underlying EBIT2 -2,997.0 -3,032.8 893.5 Adjustments (SDI's and PPA) 69.6 70.1 -124.9 EBIT -2,927.4 -2,962.7 768.6 Net interest expense -275.9 -176.5 -77.0 EBT -3,203.3 -3,139.2 691.6 Income taxes 64.2 61.4 -159.6 Group result continuing operations -3,139.1 -3,077.8 532.1 Minority interest -9.4 -9.4 -115.7 Group result after minorities -3,148.4 -3,087.2 416.4 Basic EPS (€, continuing) -5.34 -5.23 0.71 1 FY20 financials based on a pro-forma calculation according to IAS 17 | 2 FY19 figures adjusted as a result of revised classification of certain expense items as cost of sales and revisions to PPAs please refer to page 155 of the Annual Report for further details 12 TUI GROUP | Factbook | December 2020 Cash Flow & Movement in Net Cash FY20 FY20 FY19 In €m IFRS 16 IAS 17 adjusted1 EBITDA underlying -1,615.0 -2,242.6 1,359.5 Adjustments 260.0 242.1 -82.1 EBITDA reported -1,355.0 -2,000.5 1,277.4 Working capital -1,351.0 -1,260.5 -25.6 Other cash effects -234.6 -216.7 138.4 At equity income 193.3 193.3 -297.5 Dividends received from JVs and associates 7.1 7.1 244.6 Tax paid 56.1 56.1 -117.5 Interest (cash) -226.8 -127.4 -80.2 Pension contribution & payments -112.7 -112.7 -143.1 30 Sep 2020 30 Sep 2020 30 Sep 2019 Operating Cash flow -3,023.5 -3,461.3 996.6 In €m IFRS 16 IAS 17 Net capex -518.9 -518.9 -805.9 Opening net (debt)/cash as at 1 October -910 -910 124 Net financial investments 626.7 626.7 -313.4 Net pre-delivery payments 41.5 41.5 0.8 FCF after Dividends -3,193 -3,631 -597 Free Cash flow -2,874.2 -3,312.0 -121.9 Asset Finance -569 -377 -337 Dividends -318.6 -318.6 -475.4 Other 265 16 -100 Free Cash flow after Dividends -3,192.8 -3,630.7 -597.3 Disposal group - Hapag-Lloyd Cruises 352 345 Cash flow from financing 2,695.2 3,133.1 -193.4 Total net debt before lease liabilities first -4,055 -4,557 -910 o/w Payments received2 3,389.0 3,389.0 39.0 time adoption o/w Payments made3 -693.8 -255.9 -232.4 Lease liabilities first time adoption -2,366 - - Total Cash Flow -497.6 -497.6 -790.6 Closing net (debt)/cash as per Balance Sheet -6,421 - - 1 FY19 figures adjusted as a result of revised classification of certain expense items as cost of sales and revisions to PPAs please refer to page 155 of the Annual Report for further details | 2 From the issue of bonds, commercial paper and drawings from other financial facilities | 3 For redemption of loans, commercial paper and other financial liabilities 13 TUI GROUP | Factbook | December 2020 Balance Sheet 30 Sep 2019 In €m 30 Sep 2020 adjusted1 Non-current assets 12,647.8 11,947.9 Current assets 2,693.4 4,270.2 Assets 15,341.1 16,218.1 Subscribed capital 1,509.4 1,505.8 Capital and revenue reserves -1,957.8 1,948.3 Non-controlling interest 666.5 711.4 Equity 218.1 4,165.6 Non-current provisions 1,895.7 1,810.6 Current provisions 421.6 394.3 Provisions 2,317.3 2,204.9 Non-current financial liabilities